Tennessee’s talent fee is not surprising. In business, you charge what people are willing to pay

If there is one constant in the circle of life that is big business, it is that cost increases are always passed on to consumers. It doesn’t matter whether it’s food, gas, or sporting event tickets. The paying customer will almost certainly be asked to pay the difference.

The latest example came Tuesday, when the University of Tennessee announced an average 14.5 percent increase in football ticket prices through 2025, with 10 percent set aside for athlete compensation. The news should not have come as a surprise to anyone. It was as inevitable as a sunrise.

When the courts cleared the way for athletes to be paid for their name, image and likeness, and the NCAA reached a tentative $2.78 billion settlement in the House of Representatives antitrust lawsuit — the agreement provides reparations to former athletes, creates a new revenue-sharing model for schools and increases the number of scholarships across programs — the public was always going to pick up the bill.

GALLING DEEPER

Feldman: Why Tennessee Picked an Opportunity to Raise Ticket Prices

That’s the way it is in big business, and it’s certainly true in college athletics. Overpaid executives and managers rarely take the heat themselves, even when it’s their actions or inactions that are causing the problem. And make no mistake, it was the NCAA’s arrogance and inertia a decade ago, after losing the class-action lawsuit against Ed O’Bannon, that set the stage for today.

That’s not just why Tennessee is being proactive. So is Georgia, the 2021 and 2022 national champions. The Bulldogs are raising reserved seat prices from $490 to $560 per ticket, while also increasing the fee for nonconference games from $55 to $80. The minimum donation requirement per ticket to the Hartman Fund, which funds athletic scholarships and related expenses, is also increasing.

Georgia may not call it a “talent fee” like Tennessee does, but that’s exactly what it is. And they can do it because they know they have a rabid fan base willing to pay. It was no coincidence when Tennessee athletic director Danny White revealed that the Volunteers have a waiting list of 15,000 fans.

Don’t want to pay the price increases? Fine, then it’s the next man (or woman)’s turn.

That attitude isn’t limited to major college athletics. Iterations of it can be seen across the sports landscape, such as in the WNBA, where a dramatic surge in popularity and television ratings — thanks in part to a stellar rookie class led by Caitlin Clark and Angel Reese, whose teams are ranked No. 1 and No. 2 in attendance — has resulted in dramatic increases in ticket prices for next season.

For example, the Chicago Sky will raise some seats by no less than 265 percentwhile the New York Liberty shipped some packages with 155 percent, although the team says it will limit the increase to 25 percent for long-term season ticket holders. In Phoenix and Atlanta, some of the more “affordable” seats are being reclassified as club seats, which carry a higher price tag.

This is not surprising, of course. But experts say the risk of angering or alienating loyal fans of a league that has yet to turn a profit is real. One of them is Impact Pricing CEO Mark Stiving, whose firm trains companies on how to raise prices without losing customers.

“There are two sides to the story,” he told me. “One side is the fans and the other side is the business side of the business. The business side says, ‘We’ve always struggled. We’ve never been able to get people in seats. It’s great. We’re so popular all of a sudden. We have more demand, so we’re in a position to raise ticket prices dramatically.’ They can do that and they’re going to make a lot of money. The problem they’re going to have is that if the circumstances change again and they go back to the way they were before the circumstances are now, they’re going to piss off all of their fans. Nobody’s going to pay $4,000 for a season ticket, and the people who used to pay $750 are not going to buy tickets anymore, even if it goes back to $750. The danger is you’re trading lifetime value for short-term gain.”

This is the part where I normally project and talk about what should happen when you are dealing with fans/customers who supported you during the lean years. Stiving quickly corrected me.

“There’s no such thing as ‘should,'” he said. “If you believe in capitalism — and that’s what keeps our economy going — people are going to ask what other people are willing to pay. … Companies always operate on their image and their bottom line. They don’t want to be seen as, ‘I’m ripping off my customers and I’m raising prices drastically.’ But I feel like these guys are in a position where they’re saying, ‘Hey, for the first time ever I’m in a position to make some money, so let’s go make some money.'”

Tennessee fans need to stop whining about a 10% increase in ticket prices. If you want to win, this is what it costs. Hotel rooms for big games are already $1,500/night downtown and $500/night in West Knox. Success is expensive. If we want it. It’s going to cost us.

— VFL with BVS needs help (@volsnvikes) September 18, 2024

If a family of 4 goes to a Tennessee football game, tickets are $160 for crappy seats plus parking, food on a Saturday will cost you 800-1K. When is this nonsense going to stop? It’s going to be impossible for regular people to do anything.

— Roger Wilkinson (@BASEBALLSCOUTZ) September 17, 2024

Several attempts to discuss this delicate dance with the WNBA were unsuccessful, with the players’ association declining to comment.

While it’s not apples-to-apples, there are some comparisons to be made between the WNBA and college football. You don’t have to scroll deep into the comments to find fans claiming Tennessee has priced them out of the in-game experience. They’re angry and vocal — understandably so. But here’s what Volunteers leadership knows: The university is one of a relatively small group of powerful conference members whose roots run so deep in the community that their fans reach for their wallets with one hand and hold their noses with the other. They pay the tips up front. It’s part of the circle of life in big business, after all.

(Photo of coach Josh Heupel celebrating with fans after Tennessee defeated Alabama 52-49 at Neyland Stadium in 2022: Donald Page/Getty Images)